Notes for trust officers, private bankers and others concerned with estate and trust planning, from a Merrill Anderson Senior Editor and his retired mentor.

Friday, September 24, 2010

Harvard 11, Yale 9

After losing close to 30 percent in fiscal year 2009, the endowments of Harvard and Yale have staged modest comebacks. In the 12 months ending last June, Harvard's endowment recorded an 11 percent return. Yale was up 8.9 percent.

Over the last ten years, Yale's return did beat Harvard's. But both schools, and a number of others, suffered liquidity problems as a result of an increasing emphasis on alternative investments –timber, oil, real estate, private equity, etc.

Harvard University, Yale University and Stanford University, with combined endowments about equal to the gross domestic product of Lithuania, are among 15 of the wealthiest colleges and universities that borrowed $7.2 billion because their highbrow investing left them suddenly strapped for cash.